Open Coffee Waterford Notes - Sept 2008

Here in the Arclabs building in Waterford for the monthly Open Coffee morning. There are 2 speakers - Brian Kelly of SalesPulse and Garrett Wyse of WASEI.

A wet morning and hopefully that will not hit attendance as the building itself contains many emerging tech businesses.

Brian Kelly, Salespulse

Develop software for the business, education and semi-state sectors. He talked through a case study of winning, spec'ing and delivering one of their client solutions.

A VEC was the client and they had a purely paper based system for delivering English training to people for whom English was not their native language. Brian emphasised the importance of constant contact with clients throughout the change process.

They took a paper registration and brought it online in 7 difference languages to facilitate the client base. In the first season over 400 registrations were taken online and processed. The testing to assess their initial English competence was also delivered online - this allowed for the streaming of applications into appropriate levels.

The allocation of clients to locations was the next stage - combining preferences together with the filtering results. That allocation took 4 people 2 days manually and on the Salepulse system took 1 person 1/2 a day.

The next stage of the process was notification and the system allowed for using texts to send automatic notifications instead of the letters which were previously sent. Brian said that they were comfortable with replacing the physical notification with the texting.

Q from the floor - how did Salespulse get the client to accept this level of change? Brian said that they already had a relationship with another VEC via a tender process and they leveraged this relationship.

One of the measures of the success for the VEC was the accuracy of the streaming and this matched the manual testing which it had replaced.

Brian finished by saying that they had taken the product and sold it to a number of other VEC's and they have adapted it for the English Language College market.

Q - how long did it take for the detailed specification? Approx 3 months to meet, develop initial spec and then build start. Brian did say that where possible they iterate in conjunction with the client rather than doing a big build remotely.

Q - if the system is specifically tailored how do they resell. Brian said that they build in modules and allow each to be triggered on or off.

Q - do they link with external financial systems. Brian said they have systems in place with clients where they interface with existing financial software. They are also developing a night class module at the moment where it will allow for online payments.

Q - how do the price the recurring license fees. Brian said it can be tricky - combination of initial time to develop, likely resales and then usually a combination of upfront with 15% recurring support fees.

Garrett Wyse of WASEI

This is a micro lending business which is intially focused on West Africa. Investing in small businesses in developing nations. Classed as a social business enterprise, a Micro Finance Institution. (note - I participate in one called KIVA.org, banner on the side of the blog, keith)

This is a developed sector and WASEI extends the current approach.

Garrett showed us this video clip:

They extend the monetary support given by KIVA and others by offering finance, incubation and skill training. WASEI takes an equity position and will subsequently help them to develop and grow internationally in a small number of cases. They have identified a gap at the $5k to $30k level. Some of their clients will be assisted into a move into the higher tiers of local financial support - at that point the WASEI equity is bought out.

Garrett explained his background - having worked with Concern and in a dozen different countries. For him WASEI fills a key gap for entrepreneurs who have reached the upper end of the support available locally (from credit union equivalents) and who need slightly bigger and differently structured share capital together with the other supports which are delivered in Ireland via CEB's and EPP's.

WASEI has both a not for profit and also a for profit which they take investment in and offer a return on.

There was a good Q&A on his talk primarily based on the countries and regions they are planning to operate in and the risk profiles and assessment of same.Point made by Garrett that the default rate is tiny compared with developed countries. (Kiva is 1.53% currently - link here)

Fascinating talk and discussion and great structural approach to assisting developing countries instead of handing out aid.

UPDATE - Janey Bumpas in Microplace sent me information on their initiative:

 A bit about us:  We are the first microfinance investment site where  investors can invest in microfinance and get a financial return.  The  microfinance industry needs to raise about $225B to get to all the 1B folks  who live on less than $1 a day and who could use a microloan.  That's more  than charity or government aid can handle.  Socially responsible investments  ($1.3T a year) is just about the only lever big enough to provide that capital needed to address the problem.  The question in my mind today is not  should we use a profit motive or a social justice motive, but how can we scale to quickly reach everyone who needs a loan in a fair and equitable way.  We launched about 9 months ago - and are excited to work to match up investors with borrowers who need loans.

keith